Lenders, Developers and Borrowers were all frustrated by the chilling effect that revenue rulings and court cases had on Historic Rehabilitation loans in 2013, causing delays in closings and delays in admitting Federal tax credit investors as partners of the Borrower. After issuance of Revenue Procedure 2014-12, a Safe Harbor for Historic Tax Credit Transactions, a resurgence of Federal investor interest is now apparent; however, structuring loans for these transactions after the Revenue Procedure involves tackling new territory.

The ultimate goal of any Section 1031 Tax-Deferred Exchange Transaction is to avoid capital gains taxes on the sale of the taxpayer's real property. This short article explains some of the technical requirements involved in these transactions.

In case you have not heard or read, tax-related services and companies have been prolific in writing about proposed changes to rules and regulations that will eliminate or severely impede Section 1031 tax-deferred transactions.

Before December 30, 2013, a real estate developer rehabilitating a historic building in Virginia could have raised about 40% of his rehabilitation costs from outside parties. He accomplished this feat using a carefully structured limited liability company. Unfortunately, the Fourth Circuit Court of Appeals did not condone such a business structure in a case decided in early 2011.

About Our Blog

The Spotts Fain Lawful Thoughts® blog focuses on the current legal issues affecting businesses of all shapes and sizes. From labor and employment and construction, to intellectual property and beyond, Lawful Thoughts® provides businesses with easy to read, practical thoughts on the current legal trends and topics facing businesses today.

Subscribe

Enter your email address to be notified when new content is posted on our blog.